Obama Says Proposed Agency Will Protect Financial Consumers

President Barack Obama said a new agency he proposed this week as part of an overhaul of U.S. financial regulations will protect consumers from deceptive lending practices.
The Consumer Financial Protection Agency would oversee products from mortgages to credit cards and require companies to plainly state the terms of financial products while banning “the most unfair practices,” Obama said in his weekly address on the radio and Internet.
“We’re going to level the playing field for consumers,” he said.
Obama proposed on June 17 changes to government oversight of the financial industry that he said would correct a “cascade of mistakes” that helped cause the first global recession since World War II.
The changes, much of which must be approved by Congress, would add an additional layer of regulation for the biggest financial firms. Obama’s plan would make the Federal Reserve the overseer of companies deemed too big to fail and bring hedge and private equity funds under federal scrutiny.
“This crisis may have started on Wall Street,” Obama said in his radio address. “But its impacts have been felt by ordinary Americans who rely on credit cards, home loans, and other financial instruments.”
Obama said some consumers bear responsibility for the financial crisis by taking on too much debt and loans they could not afford. More people, though, were misled by financial companies, he said.
‘No Coincidence’
“It’s no coincidence that the lack of strong consumer protections led to abuses against consumers,” Obama said. “The lack of rules to stop deceptive lending practices led to abuses against borrowers.”
The new agency, Obama said, would prevent unscrupulous financial companies from taking advantage of consumers in the future.
While Obama’s proposals won support from Democrats who control the House and Senate, it is likely to face a lobbying assault from the financial industry. The American Bankers Association said in a statement after Obama announced his plan that the Consumer Financial Protection Agency may “go well beyond consumer protection” in its mandate and add a new regulatory layer for community banks.
Republican Address
In the Republican address, Senate Minority Leader Mitch McConnell of Kentucky said Democrat proposals to overhaul health care would drive up costs and lead to the rationing of care. McConnell also said Democratic congressional leaders are moving ahead too quickly with legislation.
“Americans want health-care reform, but they want the right health-care reform,” said McConnell. “That means taking the time and the care necessary to get it right.”

McConnell said the Obama administration’s claims that its health-care overhaul proposals would save the government money are the same as claims that passage of the $787 billion economic stimulus bill in February would prevent job losses. The current jobless rate of 9.4 percent is at a 25-year high.
“If the stimulus bill taught us anything, it’s that we should be wary anytime someone in Washington says the sky’s going to fall unless Congress approves trillions of dollars immediately,” McConnell said. “Yet once again in the health- care debate, it’s rush and spend.”